CPA: Better to File Extension Than an Innaccurate Tax Return
Not everyone will be ready to file their tax return by today’s deadline.
That's when accountants recommend filing a six-month extension.
Local CPA David Young says fewer than ten percent of his clients typically need that extra time, but there are several reasons some do.
"People may not be receiving all their tax returns from all of their investments. They might be late with K1s coming in or 1099s,” Young said. “Or possibly they own a business and they have to prepare their business tax return before they can prepare their personal tax return."
Young stresses that taxpayers still have to pay any state and federal taxes that are owed by the April 15 deadline, regardless of whether they need an extension to file their tax return.
He advises clients to err on the side of the government when estimating how much they owe.
"It's better to overestimate. What we do when we file a person's extension is, we pay more than we think the client will actually owe, because any overage can be applied to the next year."
Young says there is no reason that filing an extension should make a taxpayer more vulnerable to extra scrutiny from New York State or the IRS.
"As a matter of fact, I think a case could be made for just the opposite, because if you take your time making sure you're filing an accurate tax return to begin with, you'll be much less likely to be audited if you have everything where it should be and if everything is accurate and correct."